“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Vertex Pharmaceuticals, Inc. (NASD: VRTX)? Today, we examine the outcome of a ten year investment into the stock back in 2010.
| Start date: | 10/29/2010 |
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| End date: | 10/28/2020 | ||||
| Start price/share: | $38.30 | ||||
| End price/share: | $208.34 | ||||
| Starting shares: | 261.10 | ||||
| Ending shares: | 261.10 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 443.97% | ||||
| Average annual return: | 18.45% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $54,419.38 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 18.45%. This would have turned a $10K investment made 10 years ago into $54,419.38 today (as of 10/28/2020). On a total return basis, that’s a result of 443.97% (something to think about: how might VRTX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” — Warren Buffett
